There are so many uncertainties in any divorce. If you and your ex can't agree on terms for your divorce, everything will be up in the air until the courts issue a ruling. In cases where you can compromise, possibly through mediation, it is possible to come to an agreement about what will happen with your home. Typically, you will address this, along with your other possessions, debts and assets in a property settlement agreement. Barring that or a legally valid prenuptial agreement, the power will all remain with the courts.
It is impossible to predict exactly what decision the courts will make in any given divorce. After all, your family and your financial circumstances are unique. However, it is possible to look at Colorado family law and understand the most likely potential outcome for asset division in a divorce. Knowing how the courts divide your possessions will help you prepare for any potential outcome in your case.
Colorado courts work toward an equitable distribution
The divorce law in Colorado instructs the courts to seek a fair and equitable way to split up all marital debts and assets. It's important that you understand that equitable does not mean equal. Instead, it means a reasonable and fair split based on your circumstances, including custody of the children, individual income and other critical factors.
That approach will guide how the courts allocate all of your debts, as well as your possessions and assets. Your home, obviously, is one of the biggest assets you will ever acquire. Its value, your established equity and your family circumstances will impact how the courts handle your home in a divorce.
The courts may allocate the home to one spouse
It is not uncommon for the courts to decide to give the home to only one person. Often, considerations like the needs of the children and any family ties to the property will influence this decision. Individual income and credit can, therefore, also impact how the courts handle the home.
The courts will also expect the person who retains the home to refinance any mortgage(s) on the property. Doing so will remove the other spouse from both the financial obligation for the mortgage and the title for the property. The spouse who doesn't retain the home will typically receive a fair portion of the established equity cashed out or other assets of a comparable value.
Sometimes, the courts may order you to sell the home
In some circumstances, the simplest solution is to sell the home. These scenarios could include situations where there is very little equity in the property or where neither spouse can secure financing with only one income. If this happens in your case, remind yourself that selling the home actually helps you create a fresh start and fund a new beginning for you after the divorce.